The distribution network of Amazon and the footprint of freight digitalization

The emergence of e-commerce as a dominant retail paradigm is associated with a rapid shift in the commercial footprint towards distributional-based consumption. Through the analysis of the geographical expansion, market coverage, and functional specialization of Amazon's distribution network, the research underlines that digitalization has a pronounced physicality. E-commerce is favoring a transition from the conventional retail freight landscape towards a new physicality of freight distributions involving purpose-designed facilities, modes, and channels. The case of Amazon underlines a consistent locational behavior to achieve a distributional hierarchy of facilities granting logistical access to consumer markets. The distributional hierarchy is organized in three stages, which are procurement and fulfillment, distribution, and last-mile.     

UK road freight energy use by product: trends and analysis from 1985 to 1995

Since the early 1980s, energy use in road freight has been rising much faster than overall energy use in the UK. To better understand the factors driving this rapid growth, we carried out an analysis of road freight energy use trends across 14 product sectors from 1985 to 1995. Growth in length and complexity of supply chains, rather than growth of output, is shown to be the main driver of increasing freight energy consumption, with high value products having the highest energy use per tonne lifted. Policy options and a proposal for improved estimation of energy consumption are also discussed.     

Localisation of freight consolidation centres serving small road hauliers in a wider urban area: barriers for more efficient freight deliveries in Gothenburg

This paper discusses the negative impacts of freight transport growth, especially in and around urban areas. Over time, a growing number of road freight vehicles have delivered less freight over longer distances, while average load factors have been reduced. This development is unsatisfactory, as transport capacity that could have been used more efficiently is lost. To mitigate negative impact, it has been suggested that freight consolidation and better planned localisation of freight consolidation centres (FCCs) would improve city logistics. Based on primary data, this paper investigates the potential to establish urban FCCs intended for small road hauliers (SRHs) delivering goods to the retail sector in a wider geographical area, the Gothenburg region in Sweden. While the findings show that a large majority of SRHs could reach potential FCC locations in a short time, congestion affects deliveries and several factors, many of which were observed already in the 1970s, restrict FCC establishments. Under present conditions, there is little scope for SRHs to successfully deliver goods to retailers in the Gothenburg region from FCCs; therefore, a more efficient urban transport system from a business or societal perspective is unlikely. Policy makers need to take into consideration the different segments, requirements, and characteristics of different cities before venturing into costly FCC projects.     

Decomposing the decoupling of Danish road freight traffic growth and economic growth

In recent years many European countries have seen a decoupling of the growth in road freight traffic (vehicle kilometres) from economic growth. A similar decoupling has not been observed in road freight transport (tonne kilometres). In this paper the historical growth in national Danish road freight traffic and transport is attributed to causes using a Divisia index decomposition method. It is demonstrated that overall road freight traffic growth is a consequence of often opposite pointing growth effects in the underlying factors. The observed decoupling of road freight traffic growth from economic growth is mainly the result of use of larger vehicles, increasing average loads, and less empty running. Growth in road freight transport is primarily caused by growth in production. A decrease in the number of tons lifted per tonne produced (the handling factor) is offset by an increase in the tonne kilometres per tonne lifted.     

Policy insights from the urban road pricing case studies

This article reviews and compares the results of four modelling case studies of urban road pricing implementation that were carried out for the MC-ICAM project. The studies all concern large cities in Western Europe (Paris, Brussels, Oslo and Helsinki) and they all examine phased implementation paths in which constraints on the set of policy instruments are progressively relaxed. However, the studies used different models that vary with respect to the endogenous dimensions of traveller behaviour, the level of detail in which road and public transit networks are represented, and assumptions about what policy instruments are available and what constraints apply.     

A logistical perspective on the potential for modal shift of freight from road to rail in Great Britain

Freight modal shift from road to rail is a potential means by which the negative environmental and social impacts of transport can be reduced. This paper explores recent supply chain changes and assesses their impacts on the mode choice decision-making process, specifically addressing the implications for the use of rail. Despite many of the identified changes effectively making the use of rail more difficult, considerable evidence has been found of the potential for rail to attract new traffic. Much of the identified potential is unlikely to materialise, however, without improvements in rail network capability and capacity and a greater customer focus from rail freight operators.     

The role of attribute processing strategies in estimating the preferences of road freight stakeholders

Choice behaviour studies typically assume passive bounded rationality, suggesting that decision makers process all information given to them with equal attention. However, it is probable that decision makers invoke any number of attribute processing strategies (APSs) when weighing the characteristics of candidate alternatives against one another. Utilising data from a study of urban road freight stakeholders evaluating alternative packages of component trip times, fuel costs and variable user charges, this paper shows that accounting for APS heterogeneity associate with each alternative in each choice set results in differing marginal disutilities and willingness to pay for components of travel time, compared to a model which assumes passive bounded rationality.     

Flagging out in road freight transport: a strategy to reduce corporate costs in a competitive environment: Results from a longitudinal study in Austria

Following the example of maritime transport, the relocation of fleets abroad – referred to as flagging out – has become an important cost reduction strategy for road freight transport companies. Particularly after the EU Eastern Enlargement in 2004, many Austrian road freight transport companies took advantage of both the freedom of services and the lower costs in New Member States. This paper shows the results of four waves of surveys of Austrian road hauliers, describing developments, attitudes, motives and impacts of the phenomenon. There is also a discussion about the significance of the problem, which was seldom referred to in the scientific literature.     

Identifying sources of systematic variation in direct price elasticities from revealed preference studies of inter-city freight demand

Freight demand elasticity studies vary significantly in terms of the demand measure, data type, estimation method, commodity type, etc. This wide variation makes it difficult to compare empirical estimates when the differences may arise in part from the methods and data used. In this paper we conduct a comparative analysis to identify systematic sources of influence on direct price elasticity estimates in the context of freight transport, distinguishing between road, rail, and sea transport, using published direct price elasticities from 12 elasticity-derivative studies from five countries. The study focuses on revealed preference elasticities defined by the freight rate for tonnes and tonne kilometres of inter-city freight movements. Systematic sources that explain differences in direct price elasticities include the demand elasticity measure, mode, commodity class, model estimation form, country, and temporal nature of data (e.g., cross-section). Analysts can utilise the model outputs to adjust the empirical evidence from specific studies to control for differences that impact on the behavioural implications of comparative evidence.     

Segmenting industrial competitive markets: An example from air freight

This paper applies a disaggregated approach to segment industrial markets under competitive structures taking the air-freight market for the high-technology product industry in Taiwan as a case study. Data from firms is used to examine the structure of the air freight industry and we find that carriers are clustered into two strategic groups, express and forwarder. Pricing is a leading strategy recognized by customers for forwarders, whereas service punctuality and freight security are the winning strategies for express. The high-tech freight market is classifiable by shipment destination and size.     

The transition from freight consolidation to logistics: the case of Hong Kong

This paper examines the challenges and opportunities confronting the traditional container consolidation industry in Hong Kong as it strives to modernise by adopting logistics functions. The study is based upon a series of detailed surveys of the industry undertaken during a period of adjustment. Improving value-added services is seen as the key to the survival of Hong Kong as a major transportation centre; this study indicates that making the improvements represents unique challenges to the firms actually involved. The barriers and potentials for these firms to transform themselves to third-party logistics service providers are analysed.     

Analysis of intermodal freight from China to Indian Ocean: A goal programming approach

This paper presents an intermodal network optimization model to examine the competitiveness of 36 alternative routings for freight moving from China to and beyond Indian Ocean. The proposed model, which is built upon the principles of goal programming, is able to handle multiple and conflicting objective functions such as minimizing transportation cost, transit time and transit time variability while ensuring flow continuity and transit nodes compatibility among the rail, road, ocean vessel, airplane and inland waterway transports. Transportation time and cost obtained from comprehensive industry sources are then fed into the intermodal transport network connecting two important Chinese origins and four Indian destinations, from which the most attractive routes are identified. In addition, the paper investigates several non-dominated transportation cases through sensitivity analysis tests, and analyzes the potential competitiveness and possible influences of future route developments to current transportation patterns in Asia.     

Searching for policy priorities in the formulation of a freight transport strategy: a canonical correlation analysis of freight industry attitudes

An efficient and effective freight transport strategy can be aided by early professional contributions from key stakeholders. One broad group who have historically been given limited opportunity to influence the drafting of a freight strategy, are commercial road users and shippers who manufacture and distribute goods. Utilising a data set collected in Australia in 1996 from a sample of organisations involved directly and indirectly in road freight transportation, views were sought on road infrastructure changes, new road infrastructure, non-road infrastructure needs and transport policies. An optimal scaling approach using non-linear canonical correlation is implemented to search for structural relationships between the underlying policy and infrastructure dimensions and the various industry categories. This framework provides a powerful mechanism for identifying differences among stakeholders in terms of their support for or opposition to specific policies. Results reveal the considerable differences in attitudes associated with the component parts of the freight industry.     

Improved road accessibility and indirect development effects: evidence from rural Philippines

This paper develops earlier conceptual frameworks and methods for analyzing the indirect development effects of improved road accessibility. The creation of economic opportunity and response to economic opportunity are the two concepts used in the theoretical framework, while time-series data, a road accessibility inventory, and a multi-criteria analysis were the methods used to analyse the indirect effects among households and household firms. A weakness of many impact studies is that they merely chart aggregate economic development. The method employed here includes access to resources by various groups and therefore enables the focus to shift from mere aggregate economic development to also encompass equitable and sustainable social development. The study focused on a rural Philippine fishing community, previously characterized by poor transport conditions and poor accessibility to major markets. It found that the benefits of the road improvement were considerable and benefited a great majority of the population in the fishing community. In addition to the extensive direct effects of the improved road, a number of complementary factors led to substantial indirect effects. These included: abundance of harvested resource in the community; a potential for technical innovations that increased production and productivity; available investment to support this increased production; abundant demand for this increased production in the market region (the market widened in spatial terms and prices were maintained).     

Regional road development,rural and urban poverty: Evidence from China

The study estimates the impact of road investments on overall economic growth, rural and urban growth, and rural and urban poverty reduction. To achieve these goals, an econometric model that captures the different channels through which road investment impacts growth and poverty is developed and estimated using provincial-level data for 1982–1999 in China. Low-grade (mostly rural) roads have benefit/cost ratios for national GDP that are about four times larger than the benefit/cost ratios for high-grade roads. In terms of poverty reduction, low-grade roads raise far more rural and urban poor above the poverty line per yuan invested than do high-grade roads. Another significant finding of the study is the trade-off between growth and poverty reduction when investing in different parts of China. Road investments yield their highest economic returns in the eastern and central regions of China, while their contributions to poverty reduction are greatest in western China (especially the southwest region).     

How efficient and productive are road toll companies?: Evidence from Norway

This article evaluates the technical efficiency of toll companies, i.e., how toll companies perform relative to each other, their productivity, and whether toll companies improve their efficiency from one year to the next relative to the best performers. The rationale for this study is that Norwegian road toll companies have been criticized for not being as efficient as they should; it has been claimed that some have very large operational costs compared to their peers and hence are inefficient. The framework for analysis is Data Envelopment Analysis and its subsequent Malmquist Productivity indices. The data are from the accounting period of 2001–2004 and contain information on 18 companies. The results show that: (1) there is a potential for efficiency increases of about 14%, (2) there are economies of scale in the industry in that larger companies (as measured by number of lanes served) tend to be more efficient compared to smaller companies, and (3) there has been a productivity increase in the sector of about 1%, and this progress is due more to companies employing a newer and more effective method for collecting funds and less to improving efficiency from one year to the next. Finally, these findings suggest that the Norwegian road authorities should consider reorganizing the toll sector such that the inherent economies of scale are utilized.     

Regional disparity analysis of Chinese freight transport CO2 emissions from 1990 to 2007: Driving forces and policy challenges

Freight transportation and logistics act as the artery of the national economy. With a booming economy, China's freight transport sector has experienced dramatic growth in recent decades and has become a key driving force of China's CO₂ emissions. Therefore, effective and efficient mitigation policies in the freight transport sector are critical for China to promote CO₂ emission mitigation strategies. In contrast to other countries, China's challenge stems not only from technical issues but also from regional socioeconomic disparities, which in turn require the implementation of locally oriented policies. For this reason, an analysis based on regional disparity is of vital importance for future policy making. However, to date, there have been few pertinent studies on the freight transportation sector. To fill this gap, this paper aims to conduct an in-depth comparative study of CO₂ emission characteristics and the driving forces in the freight transport sector in China's three regions (covering 31 provinces) from 1990 to 2007. The log mean Divisia index method (LMDI) is employed to analyse the driving forces, and the Gini coefficient is used to investigate regional inequity. Additionally, regional disparity is explored in-depth based on the analytical results and practical concerns. The results highlight that economic structure is a key driving force for emissions change and reveal significant regional disparity and inequity in freight transport emissions. The results are critical for future policy-making to address regional concerns.     

The barge and rail freight market for export-bound grain movement from midwest to Mexican Gulf: an econometric analysis

An econometric model of the barge and rail freight market is developed so that factors which influence barge and rail rates for export-bound grain from Midwest to Mexican Gulf can be better understood. Three-stage least squares method is used to estimate the system of four equations that constitute the model. A number of identified factors turned out to be significant in determining grains rail and barge transportation rates. Given the interactive nature of supply and demand processes it is difficult to pinpoint a single most important factor. Yet it is clear that a substitute nature of the two transportation modes in addition to direct price-quantity relationship determine most of the transportation rates.     

Air freight hubs in the FedEx system: Analysis of fuel use

This paper provides a data based analysis of FedEx air freighter activities from selected hub locations. The basic idea is that air freighters have a set of range and payload parameters and their corresponding fuel burn depends on weight and distance. Data from 2011 to 12 (FlightAware) are used for 180,000 + flights on origin, destination and aircraft type. The particular aircraft vary widely in payload, but additional parameters may be derived from industry web sites and BTS. The research uses flight activity at hubs such as Memphis and Indianapolis (among others) and computes the aggregate distance flown on specific aircraft. The linkage between the hub and aggregate fuel use (assuming that the out bound flights are allocated to the hub) will give some quantifiable measures of the costs allocated to the hub. The paper examines particular aspects of the air freight system that are especially vulnerable to a spike in the costs of aviation fuel. These observations suggest that traffic to regional air express and air freight hubs is likely to respond in complex ways to fuel costs.     

Synchromodal hinterland freight transport: Model study for the port of Rotterdam

This paper develops a model that enables comparative analysis of intermodal and synchromodal operations from economic, societal, and environmental perspectives. The model captures relevant (day-to-day and within-day) dynamics in freight transport demand and supply, flexible multimodal routing with transfers and transhipments. The capacitated schedule-based assignment algorithm operating specifically at path level allows strategic modelling and evaluation accounting for the freight transport system at operational level. The Rotterdam hinterland container transport case study shows that synchromodal system is likely to improve transport service level, capacity utilization, and modal shift, but not to reduce delivery costs.